The topic of “free public transport” (FPT), or better yet “zero fare public transport” (ZFPT), is one that has gotten considerable attention here in World Streets over the last several years, on the grounds that it is an extremely rich concept which is worthy of careful attention. If at first humanistic and caring glance it appears to be a great and just concept, the fact is that like much of life it is more than a little complicated. Let us have a look at a recent article which first appeared in the pages of our sister publication Citiscope, which we reproduce here with their and the author’s permission. ZFPT in Tallinn, an insider’s view

Free public transit in Tallinn a hit with riders . . . but yields unexpected results

– By Sulev Vedler. Tallinn Estonia. Citiscope.

Last January, Tallinn, the capital city of Estonia, did something that no other city its size had done before: It made all public transit in the city free for residents.

City officials made some bold predictions about what would result. There would be a flood of new passengers on Tallinn’s buses and trams — as many as 20 percent more riders. Carbon emissions would decline substantially as drivers left their cars at home and rode transit instead. And low-income residents would gain new access to jobs that they previously couldn’t get to. As Mayor Edgar Savisaar likes to say, zeroing out commuting costs was for some people as good as receiving a 13th month of salary.

One year later, this city of 430,000 people has firmly established itself as the leader of a budding international free-transit movement. Tallinn has hosted two conferences for city officials, researchers and journalists from across Europe to discuss the idea. The city has an English-language website devoted to its experiment. And promotional materials have proclaimed Tallinn the “capital of free public transport.”

The idea has been very popular with Tallinners. In an opinion poll, nine out of ten people said they were happy with how it’s going. Pille Saks is one of them. “I like free ride,” says Saks, a 29 year-old secretary who goes to work by bus. “I have a car, but I don’t like to drive with it, especially in the winter when there is a lot of snow and roads are icy.”

Different reads on ridership

What’s less clear on the first anniversary of free transit in Tallinn is whether it has actually changed commuting behavior all that much.

Mayor Savisaar says it has. He points to numbers from early last year, showing that traffic on the biggest crossroads had decreased by 14 percent compared to a week shortly before the policy started. He has also cited substantial increases in transit riders. “We are frequently asked … why we are offering free-of-charge public transport,” Savisaar told a gathering of officials from Europe and China in August. “It is actually more appropriate to ask why most cities in the world still don’t.”

But researchers at the Royal Institute of Technology in Sweden who are evaluating the program found more modest results. They calculated an increase in passenger demand of just 3 percent — and attributed most of that gain to other factors, such as service improvements and new priority lanes for buses. In their analysis, free pricing accounted for increased demand of only 1.2 percent.

What’s more, they found that traffic speeds in Tallinn had not changed — a sign that drivers were not shifting over to riding transit as intended. Actually, the researchers said, if any modal shift is happening, it’s that some people are walking less and riding transit more. Their study notes criticisms of free transit as a “second-best pricing scheme” for discouraging automobile use, less effective than increasing the price of parking, gasoline or using the roads.

However, the researchers did find evidence of social benefits in the form of improved access to the city. Of all the districts in Tallinn, transit ridership jumped the most in Lasnamäe, a densely populated area with high unemployment and a large ethnic minority population of Russians. In Lasnamäe, transit ridership increased by 10 percent.

Experiments around the world

Tallinn isn’t the first city to experiment with free transit. Across Europe, a number of smaller cities have done it, dating back to the late 1990s. Templin, Germany was one. In France, there was the city of Châteauroux and Aubagne and some surrounding municipalities. Ridership in all of those places increased substantially when fares went away.

The most closely watched was Hasselt, Belgium. After Hasselt made its buses free in 1997, ridership increased more than tenfold. Ultimately, that wasn’t sustainable. Facing budget problems last year, Hasselt reintroduced fares of €0.60, although young people, seniors and those receiving public benefits can still ride for free.

Targeted free ridership of the sort Hasselt has got now is much more common around the world. Many cities and college towns in the United States have free “circulator” buses on downtown or campus routes. Singapore is experimenting with free train rides early in the morning to relieve crowding during the morning rush hour. And Chengdu, China has offered a mix of all these perks: free rides for seniors, free rides on 44 central bus lines and free rides from 5 am to 7 am.

What sets Tallinn’s experiment apart is its size and Tallinn’s status as a European capital. As the birthplace of Skype and online voting, Tallinn also has a reputation for innovation. So there’s a feeling, at least among advocates of the idea, that if free transit can work here, maybe it can work in other large cities.

Joining the movement

The Social Democrats, an opposition party, first floated the idea of free transit in Tallinn in 2005. It wasn’t taken seriously at first. But later, a former mayor, Hardo Aasmäe, brought up the idea again in a debate in the office of a newspaper. That was noticed by deputy mayor Taavi Aas, who thought it was worth developing further. A 2010 survey of transit riders offered more encouragement: 49 percent of respondents expressed dissatisfaction with fares, more than twice the number who complained about crowding and frequency of service.

There was money available to invest. The construction of public water and sewer infrastructure was about to end, so it was possible to finance public transport with funds that previously had gone into construction. The merger of two municipal transit companies, one that ran the buses and the other the trams and trolleybuses, also saved some money.

Mayor Savisaar unveiled the idea to make public transport free in the beginning of 2012. Savisaar said it would relieve traffic jams and reduce the number of accidents. “And what’s most important,” he explained, “free ride will provide better access to public transport to families in economically difficult situations.”

Opponents called the idea stupid. Some said the money would be better spent on building new kindergartens. Others said if there was no charge then homeless people would ride buses all day and make travel uncomfortable for everyone else.

The city administration put the question to a referendum conducted among Tallinn residents. Turnout in the election was light, but 76 percent of those who did vote said yes to free public transport.

The plan took effect January 1, 2013. Tourists still have to pay €1.60 to ride. But for Tallinn residents, a deposit of €2 gets a smart card that allows limitless travel within the city. Residents do need to swipe the card over a reader when boarding and exiting buses and trams. They also must carry an identification card proving that they are a registered resident of Tallinn.

Replenishing lost revenues

The registered resident part is crucial to how Tallinn is paying for all of this. Before, there were 40,000 unregistered residents of Tallinn, meaning that they lived in the city but were paying taxes to another town where they had previously lived. Now, free transit is an incentive for those people to register and get on Tallinn’s tax rolls.

Triin Rannar is one of them. She moved from eastern Estonia to Tallinn a year ago, and rides the bus to her job downtown each day. The offer of free transit inspired the 24 year-old to register with her new city. She estimates that she saves €23 per month by registering.

Rannar is not alone. More than 10,000 people registered as Tallinn residents in 2013, nearly three times more than registered in 2012. They contribute new annual revenues of about €10 million — almost as much as the lost farebox revenue of €12 million. “If all the registrants were taxpayers,” says Deputy Mayor Aas, “then the project costs of free transportation would be covered.”

Aas notes that the economics of free transit would be different in other cities. One reason why it works in Tallinn is that the system was highly subsidized to begin with. That’s not the case in London, for example, where fares account for 85 percent of public transport revenues. Free fares there would leave a gaping budget hole. “It is easier to waiver the ticket revenue if there’s already a large subsidy,” Aas says. “The subsidy part used to be 70 percent in Tallinn. Now it’s 96 percent.”

Can it continue?

Whether that decision was worth it is a question that will take more time to answer. In 2014, researchers hope to gain more insight into free transit’s impact on the local economy. And they hope to get more data on mode shifting, as well as how various socioeconomic groups are responding to the change.

Politically, the big question is whether Tallinn will be able to sustain free transit for the long run — or go the way of Hasselt. Aas says it’s possible to keep investing in transit even without farebox revenue. “The first year showed that yes, we can,” Aas says. “We have bought new buses. Within five years, we want to replace all buses with modern ones. And one tram line is under renovation, along with the buying of new trams.”

As Aas sees it, all this is at least as sustainable as the other services governments spend money on. “Are free education and medicine sustainable?” he says. “Or how sustainable is widening of streets and the construction of new crossroads that will soon be filled with new cars?”

But Andres Harjo, head of the city transportation department, says it’s important to remember that price isn’t everything. Free rides won’t be effective if buses and trams become overcrowded, slow, uncomfortable or unreliable. “The price of a free ride is only one measure to attract people to public transport,” Harjo says. “My feeling says that if we are able to guarantee quality, then the number of passengers will slowly and continuously rise.”

Sulev Vedler is deputy editor at Postimees, Estonia’s largest daily newspaper. Previously, Sulev was deputy editor of Eesti Ekspress, Estonia’s weekly newspaper. He studied economics in the University of Tartu. He has been working as a journalist for 20 years and has won different journalistic prizes in Estonia: the best investigative story (2003) and the best feature-story (1998, 2007, 2011). In 2008 he was named the Journalist of the Year.

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13 thoughts on “Zero Fare Public Transport in Tallinn shows a way”

This is a fascinating article. Thanks, Eric. A 14% decrease in congestion is an awesome achievement. (Yes, I read there are studies showing lower results.) As to how to “pay” for free transit? The first thing officials in Tallinn might do is ask themselves: What is 14% of the total value of our road expansion projects in the last decade? I’m oversimplifying, but those projects may have been unnecessary if free ride had been instituted ten years ago. The same number of people may have been moved around the city by transit instead of car if those funds were shifted to transit. That would reduce the private sector cost of running all those cars around, freeing up personal income, which could be spent on other goods and services. Hopefully more sustainable things than motor vehicle fuel which quickly gets spewed into the atmosphere.

Poor people gain mobility and freedom of movement. In one of the poorest neigbourhoods ridership was up 10%.

Tax evasion was replaced by tax boost Three times as many registrered av citizens of Tallinn because of free public transportation, covering 10 million euro of the costs – rendering free public transportation almost self-financed.

Free public transportation turned the tide! For the first time in 20 years, the negative trend of public transportation ridership was turned.

Tallinn is a bad example. A big factor in the lack of increase in passengers is, from experience, most likely related to a lot of people not paying for public transport before it was free anyway. The previous system was set up in a way that you could buy a single use ticket and ride around with it almost indefinitely as long as you never got checked. If you did, you just claim that you forgot to stamp it, they’d stamp it for you, you buy a new ticket and continue until checked again. I myself have only been checked once in 7 years of being in Tallinn – and that was before I actually lived here, so it was fairly easy to ride around for at least a year on one €0.70 ticket (eventually it would fall apart from wear and tear), no problem.

So most of those that wanted to ride for free were already riding for free anyway I suppose, hence the underwhelming lack of uptake

Estonie-Tallinn Shaunacy Ferro
Nobody really cared if more people would start using public transport. Why? Simply because that was a genius political move by Mister Saavisaar to comfort the votes from grandmas and Russian speakers from Lasnamae mostly. That worked brillantly and he was re-elected extremely easily!

The Swedes used metrics that have nothing to do with the real situation on the ground.

Basic facts about Estonia:
•There are no local taxes to speak of.
•Income tax makes up ~50% of municipalities’ budget.
•Income tax is collected by the government and about half of it is transferred to the municipality where the person was registered to on Dec 31th the previous year.

The only goal of free public transportation was to increase the number of people registered to Tallinn to increase tax revenue (with a bonus of appealing to core voters). Tallinn performed gloriously in this regard – the increase in taxes is several million over the cost of making public transportation free.

Comment from Mari Jussi of the Stockholm Environment Institute- Tallinn:

Traffic counts published in the end of December showed that overall number of vehicles crossing at a number of automatic counting points decreased by 0,3% in October-November 2013 compared to the previous year same period. Depending on data interpretation, next to same numbers there is data that shows that compared to 2013 September overall traffic has increased by 1,3% just between September and November as many road constructions were finished by mid-October elections.

The big problem with free transit is that it makes it much harder to justify transit improvements or investments, given that increased ridership just results in more taxes and more subsidies. I personally prefer the “user payer” model, where each transport is forced to be self-funded, with little to no subsidy, including highways.

The only country in the world that seems to apply this is Japan, where most transit companies are profitable, transit fares are distance-based, but all highways have high tolls and the gas tax is pretty high. So transit mode share is extremely high, because when the user pays for his use of infrastructure and services, the cost advantage of transit is much more evident.

And when people have to pay what their transport costs, they tend to stop wanting to sprawl as bad and to favor walkable environments.

User pay would look a lot fairer if there were road pricing. Since there isn’t, roads are overused. Unfortunately most places face problems financing transit – not just expanding it but keeping it running.

And people do not place a value on things they get for free. Most free transit experiments have shown that there is very little diversion from driving – and I would suggest that increasing transit mode share is important IF it comes from drivers. Diverting people to transit who currently walk or cycle is retrograde! Fares are not a deterrent to those who currently drive cars, but transit services that are slow, infrequent, unreliable, overcrowded, uncomfortable, difficult to use, inconveniently located are all cited by people who drive as reasons not to use transit.

Tackling these issues requires resources – money and road space being the most important. Setting aside road space for transit exclusive use is the single most effective thing to do – especially if space for driving and/or parking is taken away at the same time. Giving up fare revenues means you then have to replace that with something else even less popular!